In comments yesterday to the Atlantic Council, a Washington-based international affairs think tank, International Monetary Fund Managing Director Christine Lagarde encouraged central banks to continue to provide stimulus, including quantitative easing, as a prolonged period of weak global growth seems likely. IMF analysts expect modest gains in the U.S. and other developed economies will be offset by cooling activity in the developing world. Lagarde also mentioned the risk of prolonged low rates overinflating the price of financial assets — a timely message on the day that German four-year treasury yields fell below the European Central Bank’s deposit rate, making them ineligible for purchase by the central bank as its quantitative easing program expands.
General Electric to sell off finance divisions. Conglomerate General Electric Co. has begun seeking buys for its banking and real estate segments. The company has announced that it will retain its aircraft leasing group and that the proceeds of the sale will be used for dividend distribution and stock repurchase programs.
Deutsche Bank to settle with regulators. Reports emerged today that Deutsche Bank, the largest financial institution in Germany, is close to a settlement with regulators in the U.S. and U.K. relating to manipulation of Libor. Although official details have not been released, analysts anticipate that the full settlement amount will in the ballpark of $1.5 billion.
U.K. production numbers disappoint. U.K. February industrial production data released today registered below consensus economist forecasts. According to the Office for National Statistics, total production increased by 0.1 percent for the period following a marginal decline in January. Lower energy production resulting from low oil prices and slack demand was a primary factor for the weakness.
Hedge fund firm closes. Energy-focused hedge fund Kamunting Street Capital Management announced that it will shutter operations after taking large losses on declining oil prices. Founded by former Citigroup trader Allan Teh, the firm rose to assets in excess of $1 billion after launching in 2004.
Nikkei rises above 20,000. For the first time in 15 years, the Nikkei 225 index rose above the 20,000 level in trading today. The benchmark hit its all-time high of 38,957.44 in December 1989.
Inflation in China largely unchanged. March consumer inflation data, released by China’s National Bureau of Statistics, registered at 1.4 percent year-over-year, marginally higher than consensus forecasts. Producer prices were also slightly stronger than anticipated, however on a year-over-year growth basis, remained well inside negative territory.
